Employees

Expansion Projects Increase Employee Numbers

WACKER’s workforce increased in 2011. We had 17,168 employees worldwide as of December 31, 2011 (December 31, 2010: 16,314), 5.2 percent more than a year earlier. The increase was primarily due to WACKER POLYSILICON’s expansion projects at Nünchritz (Germany) and Charleston (Tennessee, USA), and WACKER SILICONES’ expansions at Zhangjiagang (China), Jincheon (South Korea) and Holla (Norway). Siltronic introduced short-time work in November 2011 due to lower capacity utilization. In December 2011, 782 employees were on a short-time work schedule.

12,813 WACKER employees (75 percent) work in Germany and 4,355 (25 percent) at non-German sites. We also have 113 temporary workers.

As a manufacturing company, WACKER has a large contingent of industrial employees (56 percent), about a seventh of whom are women (14 percent).

As previously announced, pyrogenic-silica production at the former site in Kempten was closed down in the third quarter of 2011. Production volumes have been transferred to existing facilities at Burghausen and Nünchritz. This structural measure affected 43 employees. WACKER’s redundancy plan did not include any involuntary layoffs. We offered all employees jobs at other sites and just under half accepted. Some employees went into phased early retirement or signed a termination agreement and assumed a new job in the local area.

Personnel expenses rose to a total of €1.28 billion (2010: €1.14 billion), up 12.9 percent on the previous year. These expenses included outlays for social benefits and the company pension plan amounting to €257.3 million (2010: €214.2 million).

In addition to their fixed base salary (which includes vacation and Christmas bonuses), WACKER employees receive variable compensation – a voluntary payment to employees both on the standard and above-standard pay scales. It consists of a profit-sharing amount and a personal-performance component. In 2011, Germany-based employees at WACKER’s chemical sectors received a profit share for 2010 amounting to 12.5 percent of their annual salary. The profit share for 2011 is also around 12.5 percent. Variable compensation payments totaled €98.5 million groupwide in 2011.

In 2011, management and employee representatives agreed on how the Demography Fund stipulated in the “Working Life and Demography” collective-bargaining agreement will be used. Accordingly, the annual “demographic sum” of €300 per full-time employee will be paid into the company pension plan. As this amount was first offered in 2010, the company provided €600 per full-time employee in the year under review. All standard and above-standard pay scale employees, excluding members of executive personnel (OFKs), receive the demographic sum. In addition to, and independently of, the demographic sum governed by collective-bargaining agreements, WACKER provided a one-time sum of €16.8 million as start-up financing in 2011.

IG BCE (the German mining, chemicals and energy labor union) and chemical industry employers agreed on a new 15-month collective-bargaining agreement in March 2011. The pay scales increased by 4.1 percent. Training allowances were raised by €35 per month.

A WACKER pension is an important compensation component and is available at most of our German and non-German sites – except for regions where legal provisions are inadequate or the statutory pension appears sufficient. In Germany, we offer employees a company pension via Wacker Chemie VVaG’s pension fund (a mutual insurance company). The fund has some 16,800 members and provides pension payments to some 7,300 retirees. The average pension paid was around €630 per month. WACKER pays up to 2.5 times its employees’ annual pension contributions, with the exact amount being determined by the type of agreement. In addition, employees have the opportunity to enlist in a private plan that minimizes their tax burden while saving for retirement.

Training – A Key Focus of Our Personnel Development

Vocational training has always been a key focus of personnel development at WACKER. In 2011, 203 young people began their training at WACKER or at the Burghausen Vocational Training Center (BBiW). In total, the company employed 663 trainees, 24 fewer than a year earlier (2010: 687). Of these, 563 are in scientific and technical disciplines and 100 in business-related fields. At 4.9 percent, the percentage of trainees (number of trainees to Group employees in Germany) was slightly below last year’s average but still at a high level (2010: 5.3 percent). The decrease was due to the high number of trainees who were able to shorten their training. We offered permanent jobs to most of our suitable and interested trainees in 2011. In total, 176 were kept on. The Burghausen Vocational Training Center (BBiW) also trains young people for some 30 partner companies. The public foundation set up by WACKER thus satisfies an intercompany training mandate – in 2011, partner companies sent 59 trainees to start courses at the BBiW.

The BBiW’s high quality of training is evidenced by all the awards won by trainees. In the year under review, a WACKER trainee won a German electronics competition. A chemical lab technician and a chemical lab assistant completed their final examinations as the best trainees in their field in Bavaria.

WACKER also trains young management talent, offering a General Management Trainee Program. In 2011, four graduates participated in the 18-month program. Since its launch in 1997, 71 young people have completed the trainee program.

We offer all our employees opportunities for additional training because we want to promote their strengths and provide them with the skills they need to succeed. At least once a year, employees and supervisors agree on development measures during performance reviews. This approach applies to all hierarchy levels. In 2011, about 100,000 e-learning sessions were completed and more than 14,000 participants attended seminars, advanced training courses and conventions, or received tutoring. Siltronic’s online courses and seminars were included for the first time.

Developing and Recruiting Managerial Leaders

Identifying and preparing potential leaders is another goal of our personnel management. This is handled at WACKER by a uniform groupwide process. In 2011, 13 above standard-pay scale employees with executive potential completed the 2010/2011 round of the Focus Program. The 2011/2012 round of the OFK Management Circle for recently appointed executives started with 11 participants. Overall, WACKER’s 2011 investments in personnel-development measures and advanced training amounted to €7.4 million (2010: €5.8 million).

We reorganized Human Resources and reallocated responsibilities in 2011. The new organization is based on two main components. First, HR support for business divisions and corporate departments and, second, concentrating on service functions and a holistic HR management. The latter includes personnel development, compensation systems, groupwide talent management and the establishment of strategic HR planning. These tasks are now consolidated across the entire Group, and cover Siltronic, which previously handled such issues within its own organization. We established the Corporate Recruiting & HR Marketing department as part of the reorganization. It is tasked with developing a specific employer brand for WACKER. This brand will give us a fresh face on the labor market and make us even more attractive to future employees, above all from engineering and the natural sciences. We surveyed our employees about WACKER’s employer characteristics in 2011 and used the results to create our employer profile.

WACKER will launch production of polysilicon at its new Charleston (Tennessee) site in the USA in 2013. The company plans to have hired 500 new production employees by then. We founded a joint training center with the local Chattanooga State Community College to help recruit these qualified employees. The WACKER INSTITUTE will train mechanical, electronics, chemical and lab technicians. WACKER is providing $3 million to support this program.

More Employee Ideas Submitted

WACKER encourages its employees to submit ideas on how we can do things even better. That helps us keep the Group competitive. In 2011, our employees again submitted more suggestions than in the previous year. Overall, we received 8,220 suggestions (2010: 7,702) – roughly 6.7 percent more than in the previous year. That brings us yet another step closer to our goal of every second employee contributing ideas. The participation rate (number of submitters per 100 employees) increased to 34 percent, up from 33 percent in 2010. The calculable benefit amounted to €7.8 million (2010: €10.5 million).

The German Institute of Business Administration (“dib”) in Frankfurt ranked WACKER sixth out of 33 chemical companies assessed for idea management. That places us among the most imaginative chemical companies in Germany. The institute analyzed data from 176 enterprises and corporations representing 13 industries for the study.

WACKER has been addressing demographic change intensively for several years. The average age of the Group’s workforce at the reporting date was 41.9. Employees at non-German sites are younger (average age: 40.5) than in Germany (42.4). The age structure abroad varies greatly from region to region. Staff at Asian sites are comparatively young (average age: 34.9), while staff at US locations have an average age of 47.8. They reflect each continent’s and country’s age structure.

Demographic Analysis of German and International Sites in 2011

Award for Integration of Disabled Employees

WACKER wants to maintain its long-term innovative and competitive strength. To that end, we have set ten strategic goals, involving measures ranging from health programs to basic and advanced training aimed at employee flexibility. In health management, we are increasing our efforts in five fields. We are working on avoiding spinal disorders and cardiovascular diseases in our workforce, increasing mental resilience, enabling age-appropriate work and finding suitable jobs for staff with health restrictions.

The Bavarian state government presented WACKER with its 2011 “JobErfolg” (Job Success) Award in 2011, which recognizes companies for outstanding performance in integrating disabled persons. For years, WACKER has always employed more disabled than required by law (percentage of staff: 6.8 percent; legally mandated: 5 percent).

WACKER’s exemplary social benefits, performance-oriented compensation and challenging tasks make us an attractive employer. This is also apparent in the long-term commitment of our employees to our company. The average length of service in Germany (permanent staff) was 16.7 years (2010: 17.2 years). The 2011 employee turnover rate was 2.9 percent groupwide (2010: 2.5 percent) and in Germany only 0.9 percent (2010: 0.6 percent). At non-German sites, it was 8.9 percent (2010: 8.7 percent).

Managers Rank WACKER as Top Employer

No other German chemical or pharmaceutical company received a better evaluation from its own managers than WACKER. The annual satisfaction survey by Germany’s Association of Chemical-Industry Executives (VAA) for the first time ranked WACKER number 1 out of 25 companies surveyed with a score of 2.8 (on a scale of 1 to 5, with 1 being the highest). WACKER was ranked fifth in the 2010 survey and second in 2009. 2011 was the third time that the Corporate Research Foundation (CRF) honored WACKER Greater China as a “Top Employer.” CRF is an independent organization that has been rating companies since 1991 for such aspects as management style, personnel development, and corporate goals and strategies.